Foley-Carter Ins. Co. v. Commonwealth Life Ins. Co.

• Citation: 128 F.2d 718
• Decision Date: 15 July 1942
• Docket Number: No. 10044.,10044.
• Parties: FOLEY-CARTER INS. CO., Inc., v. COMMONWEALTH LIFE INS. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

128 F.2d 718 (1942)

FOLEY-CARTER INS. CO., Inc., v. COMMONWEALTH LIFE INS. CO.

No. 10044.

Circuit Court of Appeals, Fifth Circuit.

June 11, 1942.

Rehearing Denied July 15, 1942.

Fred T. Saussy and John I. Viney, both of St. Petersburg, Fla., for appellant.

John D. Harris and Harvey L. McGlothlin, both of St. Petersburg, Fla., for appellee.

Before FOSTER, HUTCHESON, and McCORD, Circuit Judges.

HUTCHESON, Circuit Judge.

The suit, on an implied contract for commissions, based upon the reasonable value of plaintiff's services in the sale of a parcel of real estate, The Taylor Arcade, was in two counts, each count in 13 paragraphs. The second count adopted the first 11 paragraphs of the first count and added to the 12th and the 13th paragraphs, the allegation, that defendant in bad faith and for the purpose of attempting to deprive plaintiff of a commission while taking advantage of its services, plaintiff being the procuring cause of the sale, sold the property direct at a reduced price to plaintiff's customer. The first 7, and the 9th, and 10th paragraphs,¹ were by way of inducement. The 8th, 11th, 12th, and 13th paragraphs, set out the grounds of the claim. These, as plaintiff sets them out, are; "plaintiff informed the defendant company that it intended to endeavor to induce Haige, the tenant, to purchase the entire property and inquired the asking price, and the defendant authorized and directed plaintiff to offer the property for sale to Haige at the asking price of $350,000, well knowing and understanding by reason of the previous activities and services conducted and performed that plaintiff as successor to Foley-Carter Insurance Company, would endeavor to induce Haige to purchase the property and that plaintiff would and should receive from the defendant the usual and customary real estate commissions of 5% of the sales price in the event that plaintiff should succeed in inducing him to purchase the property at said asking price or at such modified price as the defendant might subsequently accept before the agency was revoked, * * * if plaintiff was the effective or procuring cause of Haige's becoming the purchaser of the property." It was further alleged that plaintiff went to work endeavoring to get Haige to purchase the property at the asking price and continued to work uninterruptedly for the defendant endeavoring to effect the sale; that while plaintiff was continuing his negotiations, defendant, without inquiry of or notice to plaintiff, contacted Haige directly, reduced the asking price of $350,000 to the sum of $215,000 and on September 1, 1938, did sell the property to him for that sum.

It was further alleged: that plaintiff was the procuring cause of the sale; that it acted throughout in the utmost good faith, made diligent efforts to persuade Haige to purchase the property and by its efforts succeeded in interesting him as a prospective purchaser; that defendant had availed itself of the benefit of the services of plaintiff and thereby had become liable to pay plaintiff 5% on $215,000.

The second count is upon the same claim with the added allegations that defendant acted as it did in bad faith and for the purpose of depriving plaintiff of commissions. Defendant moved under Rule 12 (b), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, to dismiss the petition for "failure to state a claim upon which relief can be granted." The motion was sustained and this appeal to test the correctness of that ruling followed. Here appellant invoking Rule 8 (b), Construction of Pleadings, "all pleadings shall be so construed as to do substantial justice",² insists that so construed his pleadings state a claim which, if proven, would entitle him to judgment.

Appellee standing on Rule 12 under the authority of which he made his motion and on Rule 8 (a) (2),³ and (e),⁴ insists that no recoverable claim is set out. We agree with appellee. The law governing suits for commissions is simple and well understood. They may be either on express or on implied contracts. If on an express contract the petition should show the express agreement for commissions and that the agreement was complied with. If on an implied contract, the petition should state facts from which a contract for commissions will be implied and facts showing performance by plaintiff of that contract. Plaintiff's suit is upon an implied contract. Its petition must therefore be searched first for facts from which a contract for commissions will be implied, and second, for facts from which it might be found that the contract thus implied has been performed.

Subjected to that test plaintiff's petition fails in both respects. As to the existence of the implied contract, instead of alleging facts from which an agreement to pay a commission if Haige⁵ should buy the property by direct purchase from defendant could be implied, the petition negatives such an implication. For, it alleges merely that advised by plaintiff on February 15, 1938, that it intended to endeavor to induce Haige to buy the property, defendant in response to plaintiff's inquiry for the asking price, on March 10, 1938, authorized and directed plaintiff to offer the property for sale to Haige at the asking price of $350,000; and that while plaintiff was...